Stablecoin legislation is subcommittee’s first priority, says Lummis

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The Senate Banking Committee’s Digital Asset Subcommittee held its first hearing yesterday and, unsurprisingly, stablecoins took center stage. 

Cynthia Lummis, who chairs the newly minted subcommittee, said that stablecoin legislation is its top priority. A market structure bill, which we started to see movement on last session, will follow. 

“We’re on the precipice of finally creating a bipartisan legislative framework for both stablecoins and market structure,” she said. 

Former CFTC Chair Timothy Massad, a witness during the hearing, advised lawmakers to zero in on stablecoins. Market structure legislation should be punted until fundamental questions are answered. 

“Market structure regulation requires resolving some complex regulatory boundaries, including when is a digital asset a security, a commodity, both or neither?” he said. “There is a risk that we will significantly undermine the securities law framework that has served this country so well and has made our securities markets the envy of the world.” 

The comments come as the industry continues to speculate on what a stablecoin bill might look like. Lummis’ GENIUS Act, introduced alongside Democratic Senator Kirsten Gillibrand, stipulates that “payment stablecoins” must come from registered issuers and have 1:1 backing from fiat currency “or other secure reserves.” 

Generally speaking, the industry and both parties agree on these general terms, but the details are a bit trickier to iron out. Democrat Mark Warner yesterday said he’s seen “a whole bunch of bad stuff” and is advocating for more robust KYC requirements. 

Should the GENIUS bill progress, we are likely to see another hearing with the full Senate Banking Committee. 

But the timeline on if and when this may happen remains unknown.

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